July 6, 2022

Manufacturing in China Grew Only Slightly in December

BEIJING — Big manufacturers in China narrowly avoided a contraction in December, a survey showed Sunday, but downward risks persist and suggest that the Chinese economy will need fresh policy support to counter a slowdown in growth.

The official purchasing managers’ index, which is compiled by the China Federation of Logistics and Purchasing on behalf of the National Bureau of Statistics, rose to 50.3 points in December from 49 in November.

That indicated a slight expansion in business activity in the vast Chinese factory sector, but the reading was barely above 50, which separates expansion from contraction.

The index fell below 50 points in November for the first time since early 2009.

Analysts had expected the official purchasing index to be at 49.1 in December.

“The rebound in the December P.M.I. shows that there will be no big slowdown in the Chinese economy,” Zhang Liqun, a researcher with the Development Research Center of the State Council, wrote in a statement accompanying the survey.

The economy faces downward pressure, but there are positive elements that could underpin growth, the researcher said.

The new orders index rose to 49.8 points in December, from 47.8 in November, while the index for new export orders rose to 48.6 from 45.6 in November.

A similar survey Friday by HSBC and Markit, a British data provider, which captures data from smaller factories, moved up to 48.7 points in December from a 32-month low of 47.7 in November.

But the HSBC-Markit survey, which captures data from smaller factories, signaled a modest contraction in activity on the month.

Despite the rise in the official survey, it is stuck near its weakest levels since early 2009.

Economists at Citibank said China was more likely to take policy steps to combat what the bank saw as a tangible slowing of economic activity.

“Accumulating evidence of economic weakness would herald more policy easing in the months ahead, starting with another” cut in reserve-ratio requirements by the Chinese New Year, which is on Jan. 23, Citibank said in a note to clients.

“Although domestic consumption held up steadily, its contribution may have been more than offset by weakened investment activity and deteriorating foreign trade conditions,” the note said.

China’s central bank is in the spotlight, with many analysts expecting that it will soon announce a cut in the required reserve ratio that it demands commercial lenders hold.

The central bank cut the reserve ratio by half a percentage point on Nov. 30 from a record high of 21.5 percent.

Cutting the ratio frees up funds that could be used for lending to support growth, but China’s leaders remain wary of relaxing their grip too soon on inflation.

The official survey showed that a significant drop in price pressures in November did not follow through to December.

The prices index of the official purchasing managers’ index rose to 47.1 from 44.4 in November.

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Youth, Mobility and Poverty Help Drive Cellphone-Only Status

At the other extreme? People in Rhode Island, Connecticut and New Jersey are still holding on to their landlines, and they have the lowest concentrations of people whose homes use only cellphones.

The study, released Wednesday, was part of an annual survey conducted by the National Center for Health Statistics. Information from interviews was blended with census data to draw a map of cellular-only use by state.

Its findings reflect patterns of consumer behavior that are driven by age, mobility and, in a strange twist, poverty. According to Stephen Blumberg, the researcher who conducted the study, nearly 40 percent of all adults living in poverty use only cellphones, compared with about 21 percent of adults with higher incomes.

There appear to be many reasons for this. Cellular phones have become more affordable. The barrier to owning one is lower with pay-as-you-go plans. Some states allow subsidies for low-income residents to be applied to wireless bills. And increasingly, those who cannot afford both types of phones choose their cellular phone.

It is, of course, a long way from the days when cellphones belonged exclusively to wealthy business people. In fact, the wealthiest areas — New England, New York, California — had some of the lowest concentrations of cellular-only households.

Rhode Island and New Jersey were the lowest at 12.8 percent of adults and children in cellular-only households. Just above was Connecticut at 13.6. New York was at 17 percent and California at 18 percent.

By contrast, Arkansas had the highest concentration of people in cell-only households, at 35.2 percent. Next was Mississippi at 35.1 percent, Texas at 32.5 percent, North Dakota at 32.3 percent, Idaho at 31.7 percent and Kentucky at 31.5 percent.

Those who were more nomadic were more likely to use only cellular phones. Forty-seven percent of renters were wireless-only, compared with 15 percent of owners, Mr. Blumberg said.

Age is another important factor. Forty-four percent of people between the ages of 18 and 30 are cellular-only users, compared with just 18 percent of those 31 and older, Mr. Blumberg said.

Some of the places with the lowest concentrations of cellular-only households were also the oldest. According to Andrew A. Beveridge, a sociology professor at Queens College, Connecticut was the seventh-oldest state in the country by median age in 2009, Rhode Island was the eighth and New Jersey was the 11th.

“It would not surprise me if that phrase ‘home telephone number’ goes the way of rotary dial telephones and party lines,” Mr. Blumberg said. “Instead of teaching a child a home phone number, the child will be taught Mom’s number and Dad’s number and Grandma’s number.”

California seemed to be an exception to the rule. It had one of the lower concentrations of cellular-phone only households, even though its median age makes it the sixth youngest state, according to 2009 census data.

James E. Katz, director of the Center for Mobile Communication Studies at Rutgers University, said one reason could be the generous subsidies the state gives low-income residents for local calling on landlines.

While some states participate in a plan that allows subsidies to be applied to cellular service, California does not, something that masks what would otherwise be much higher rates of cellphone-only households, Dr. Katz said.

Another factor appeared to be the prevalence of landlines. In 2000, Mississippi was No. 2, after Puerto Rico, for the portion of residents who did not have a home phone, according to census data. Arkansas was No. 4. In both states, the number was less than 7 percent of all households.

Robert Gebeloff contributed reporting from New York.

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